Regulators don’t give utility what it wants

State regulators on Wednesday slashed Atlantic City Electric’s proposal to raise electric bills, granting an increase that is about 70 percent lower than what the utility requested.

In March, the South Jersey utility asked the state Board of Public Utilities for permission to raise rates by 5.6 percent to pay for electric network improvements and investments made in recent years. The proposal would have brought in $61.7 million. But the board’s approval was for a 1.65 percent increase, which will raise about $19 million, about 30 percent of the original request.

As of Sept. 1, a typical customer using 1,000 kilowatt-hours per month will see a bill that is $2.81 higher as it rises from $171.73 to $174.54 per month. The increase comes through the utility’s base rate, which covers transmission and distribution expenses and pays for operational and capital costs. Atlantic City Electric passes through the cost of the electricity itself, whether purchased from the utility or a third-party supplier.

“Atlantic City Electric strives to keep costs to a minimum,” said Vince Maione, Atlantic City Electric’s regional president. “However, in order to continue providing quality service, it’s important to invest in new infrastructure and upgrade our existing electrical systems.”

Since 2012, the utility has made upgrades to about 150 feeders, high-voltage lines that distribute electricity to customers; installed automated switching technology on about 30 feeders designed to isolate outages and restore power to customers quicker; and upgraded about 165 miles of wire.

Future work includes building new substations, replacing transformers, poles and wires, and replacing some wooden utility poles with steel poles where warranted, the utility said.

The rate increase is a result of negotiations between the utility, the board’s staff and the state Division of Rate Counsel. “We tried very hard to get the numbers down,” said the division’s director, Stefanie A. Brand. “We were able to reach what is a very reasonable settlement.”

The utility has won approval to hike bills in 2010, 2012 and 2013, raising a total $73 million in revenue. The agreement over this latest increase “reduces the burden on ratepayers who have seen an increase every year in the ACE territory,” Brand said.

Those increases have come as part of a concerted effort to improve system reliability and customer service, Brand said.

“They have been investing heavily in that infrastructure,” Brand said. “We really do want to see an increase in reliability and we are seeing that is having a positive effect.”

Atlantic City Electric serves 547,000 electric customers in South Jersey, including about 52,000 in Long Beach Island, Eagleswood, Little Egg Harbor, Stafford, Tuckerton and parts of Barnegat, Lacey and Ware­town.